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Hidden Value Gems
RT @HiddenValueGems: Best ideas from Pzena PMs:
1️⃣ $C Citi - expense structure has peaked, costs will be coming off, 7-8x PE and a discount to Book Value
2️⃣ $BABA - little optimism despite improving fundamentals. EV is only $80-90B after adjusting for cash and all the incesmtsnts and they generated $20B of FCF in the past 12 months.
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RT @HiddenValueGems: Best ideas from Pzena PMs:
1️⃣ $C Citi - expense structure has peaked, costs will be coming off, 7-8x PE and a discount to Book Value
2️⃣ $BABA - little optimism despite improving fundamentals. EV is only $80-90B after adjusting for cash and all the incesmtsnts and they generated $20B of FCF in the past 12 months.
1/5
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Hidden Value Gems
The problems faced by the Tobacco companies:
➡️"[US] Smokers are switching to smoke-free products such as vapes in higher numbers than expected. If the trend continues, it will only take another three years for cigarettes’ share to slip below 50%."
➡️"Cigarette companies’ defense against falling volumes has long been their amazing ability to raise prices. Between 2018 and 2023, Altria grew its operating profit by 27%, even as cigarette industry volumes in the U.S. shrank by more than a fifth."
➡️"But the old trick may be stalling...If companies want to remain as profitable as they have been in the past, they need to grow their smoke-free brands quickly. Progress looks mixed. At BAT, sales of smokeless products grew 21% last year but they still generate less than a fifth of the company’s total revenue. Altria’s on! nicotine pouches are booming, but its smokeless portfolio is small."
➡️"PMI, which owns the Marlboro brand outside the U.S., started investing in smokeless products earlier than its rivals and they now account for 40% of its net revenue. The company will take over the U.S. rollout of its IQOS heated tobacco sticks in May."
via @WSJ
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The problems faced by the Tobacco companies:
➡️"[US] Smokers are switching to smoke-free products such as vapes in higher numbers than expected. If the trend continues, it will only take another three years for cigarettes’ share to slip below 50%."
➡️"Cigarette companies’ defense against falling volumes has long been their amazing ability to raise prices. Between 2018 and 2023, Altria grew its operating profit by 27%, even as cigarette industry volumes in the U.S. shrank by more than a fifth."
➡️"But the old trick may be stalling...If companies want to remain as profitable as they have been in the past, they need to grow their smoke-free brands quickly. Progress looks mixed. At BAT, sales of smokeless products grew 21% last year but they still generate less than a fifth of the company’s total revenue. Altria’s on! nicotine pouches are booming, but its smokeless portfolio is small."
➡️"PMI, which owns the Marlboro brand outside the U.S., started investing in smokeless products earlier than its rivals and they now account for 40% of its net revenue. The company will take over the U.S. rollout of its IQOS heated tobacco sticks in May."
via @WSJ
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Hidden Value Gems
6⃣ "Controlling shareholders can make the stock price fall and then make minority shareholders sell
to them."
7⃣"If control changes, only the controlling shareholders get the premium."
8⃣"Directors’ loyalty is to the company, not shareholders." hermes-investment.com/upload…
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6⃣ "Controlling shareholders can make the stock price fall and then make minority shareholders sell
to them."
7⃣"If control changes, only the controlling shareholders get the premium."
8⃣"Directors’ loyalty is to the company, not shareholders." hermes-investment.com/upload…
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Hidden Value Gems
5⃣"While such buybacks at cheap valuations theoretically benefit all shareholders, the shares bought back are not cancelled. They remain available – if necessary – to be on-sold by directors to friendly parties if control ever needs to be more fully secured."
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5⃣"While such buybacks at cheap valuations theoretically benefit all shareholders, the shares bought back are not cancelled. They remain available – if necessary – to be on-sold by directors to friendly parties if control ever needs to be more fully secured."
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Hidden Value Gems
3⃣ "Low dividends keep cash receipts and stock prices down – just the way many controlling shareholders like it."
4⃣ "The creative methods some controlling shareholders use to extract cash": related party transactions (e.g. selling property to the company they control at eye-popping valuation, royalty payments).
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3⃣ "Low dividends keep cash receipts and stock prices down – just the way many controlling shareholders like it."
4⃣ "The creative methods some controlling shareholders use to extract cash": related party transactions (e.g. selling property to the company they control at eye-popping valuation, royalty payments).
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Hidden Value Gems
An interesting piece on the reasons for huge valuation discounts of Korean companies (by Federated Hermes):
1⃣ "The high effective inheritance tax that applies in South Korea to large estates, which (after surcharges) can be as high as 60%." This forces controlling shareholders to extract value from companies in other ways.
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An interesting piece on the reasons for huge valuation discounts of Korean companies (by Federated Hermes):
1⃣ "The high effective inheritance tax that applies in South Korea to large estates, which (after surcharges) can be as high as 60%." This forces controlling shareholders to extract value from companies in other ways.
1/5
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BizToc
4) Bitcoin ETFs Stir Market —
The arrival of Bitcoin ETFs on Wall Street shakes up the crypto market, possibly reshaping digital asset investment strategies. #BitcoinETF
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4) Bitcoin ETFs Stir Market —
The arrival of Bitcoin ETFs on Wall Street shakes up the crypto market, possibly reshaping digital asset investment strategies. #BitcoinETF
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BizToc
3) India's Chip Sector Boost —
India greenlights $15 billion investment for semiconductor manufacturing, marking a significant tech industry milestone. #Semiconductor
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3) India's Chip Sector Boost —
India greenlights $15 billion investment for semiconductor manufacturing, marking a significant tech industry milestone. #Semiconductor
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BizToc
📰 BizToc.com Hourly News Flash
1) Kretinsky's New Atos Bid —
Czech billionaire Daniel Kretinsky considers a fresh takeover offer for French tech firm Atos, eyeing strategic expansion. #Atos
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📰 BizToc.com Hourly News Flash
1) Kretinsky's New Atos Bid —
Czech billionaire Daniel Kretinsky considers a fresh takeover offer for French tech firm Atos, eyeing strategic expansion. #Atos
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BizToc
4) Haleon Accelerates Growth —
Haleon reports accelerated revenue growth, defying market challenges and bolstering consumer health confidence. #HaleonGrowth
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4) Haleon Accelerates Growth —
Haleon reports accelerated revenue growth, defying market challenges and bolstering consumer health confidence. #HaleonGrowth
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